Virginia LLC Taxes
After you start a Virginia LLC, it's important to understand your tax obligations. The taxes your LLC owes depend on how it's classified, state and local rules, whether you sell taxable goods or services, and whether you have employees.
LLC Pass-Through Taxation
By default, LLCs don't pay taxes directly. Instead, the LLC members report the income (or losses) on their personal Form 1040 tax return. This is called pass-through taxation — tax responsibility "passes through" the LLC to its owners.
How Are LLCs Taxed in Virginia?
By default, a Virginia LLC is taxed by the IRS based on the number of members:
- An LLC with 1 owner (Single-Member LLC) is taxed like a Sole Proprietorship
- An LLC with 2+ owners (Multi-Member LLC) is taxed like a Partnership
These are the "default" statuses — automatically applied based on member count. You can also elect to have your LLC taxed as a Corporation (S-Corp or C-Corp) by filing extra paperwork with the IRS.
Single-Member LLC (default)
The IRS treats Single-Member LLCs as Disregarded Entities — the LLC doesn't file its own federal return. Instead, the owner reports LLC income on their personal Form 1040 (Schedule C if owned by an individual).
Multi-Member LLC (default)
Multi-Member LLCs file a Form 1065 Partnership Return and issue a Schedule K-1 to each member. Each member then reports their share of profits on their personal Form 1040.
Electing Corporate Taxation
- S-Corporation: File Form 2553 with the IRS. Can reduce self-employment taxes once the LLC has consistent profits (generally $70,000+ net income per member). Speak with an accountant first.
- C-Corporation: File Form 8832 with the IRS. Uncommon for small LLCs. Primarily useful for large employers offering healthcare fringe benefits.
Virginia State Income Tax
Virginia has a state income tax at rates of 2%–5.75% (graduated). LLC members report their share of LLC profits on their Virginia state tax return.
Single-Member LLC owners file Virginia Form 760 and include LLC income. Multi-Member LLCs file Virginia Form 502 (Pass-Through Entity Return) and issue VA Schedule VK-1 to members.
Contact the Virginia Department of Taxation at 804-367-8031 for more information.
Local Income Tax
You and/or your LLC may also need to file and pay income taxes with your local municipality (city, county, etc.). Contact your local government or hire an accountant to confirm local requirements.
Virginia Sales Tax
If your LLC sells taxable products (and sometimes services) in Virginia, you may need to collect sales tax and register for a Seller's Permit (also called a resale license or sales tax permit).
Virginia's statewide sales tax rate is 5.3% (including 1% local). Northern Virginia and Hampton Roads regions have an additional 0.7%, making their rate 6%.
Register for Virginia Seller's Permit →
Contact the Virginia Department of Taxation at 804-367-8037 with questions.
Virginia LLC Payroll Taxes
If your Virginia LLC has employees, you must handle payroll taxes, which include:
- Federal income tax withholding
- Virginia state income tax withholding
- Social Security and Medicare taxes (FICA)
- Federal unemployment tax (FUTA)
- Virginia state unemployment tax (SUTA)
Payroll calculations are complex — most LLC owners hire a payroll service or accountant.
Virginia Tax Agency Contact
Virginia LLC Taxes — FAQs
Read the step-by-step formation guide with filing fees, processing times, and annual report deadlines.